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"The Plan is to Take You Over by Force"

As the economy implodes, the social fabric frays and nutball groups organize for Armageddon. Pam Martens describes the national game-plan of the “Free State Project”. He was the richest man on the planet and in 1973 he pledged to shut down the illegal drug industry in New York. Thousands, mostly blacks and Hispanics were pitch-forked into prison for decades. This year New York State will repeal its drug laws. Read Bruce Jackson on Nelson Rockefeller’s curse. Half a million new jobless every month and the salesmen of “free trade” still hawk their credo. Paul Craig Roberts describes what offshoring has done to America. Get your new edition today by subscribing online or calling 1-800-840-3683 Contributions to CounterPunch are tax-deductible. Click here to make a donation. If you find our site useful please: Subscribe Now! CounterPunch books and gear make great presents.

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Today's Stories

April 20, 2009

Andrea Peacock
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April 14, 2009

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April 6, 2009

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April 2, 2009

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George Bisharat
Israel's Impunity Must End

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Something is Rotten at PBS

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Has Washington Lost Lebanon?

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Obama and the Ruling Class: "Only the Little People Pay Taxes"

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April 1, 2009

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Eric Walberg
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Richard Morse
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March 31, 2009

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Peter Lee
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Dave Lindorff
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Ron Jacobs
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March 30, 2009

Michael Hudson
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Patrick Cockburn
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Henry A. Giroux
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Mike Whitney
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Robert Bryce
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April 20, 2009

Reconsidering U.S. Power in a Time of Economics Crisis

American Empire Foreclosed?

By MARK ENGLER

Not long ago, excitement over American imperialism reached levels not seen in a century. “People are coming out of the closet on the word ‘empire,’” the right-wing columnist Charles Krauthammer told The New York Times in early 2002. Neoconservatives were on the rise in Washington, and their leading propagandists were not shy in making the case for aggressive expansionism.

Wall Street Journal editor Max Boot, for instance, took issue with Pat Buchanan’s belief that the United States should be a “republic, not an empire.” “This analysis is exactly backward,” Boot wrote. “[T]he Sept. 11 attack was a result of insufficient American involvement and ambition; the solution is to be more expansive in our goals and more assertive in their implementation.” He added, “troubled lands today cry out for the sort of enlightened foreign administration once provided by self-confident Englishmen in jodphurs and pith helmets.”

It is hard to believe that those sentiments, hallmarks of George W. Bush’s first term, were features of our very recent history. The debate they were a part of now seems distinctly strange and foreign. Since then, the world has experienced a catastrophic occupation in Iraq, and voters have ousted the Republican vanguard of the “War on Terror.” Overt defenders of imperialism have found good reason to creep back into their wardrobes.

And that, of course, is to say nothing of the bursting of the housing bubble, the fall of Lehman, and the end of the hedge fund era. With unemployment rising and Wall Street shamed, we have entered a period of economic downturn acute enough to raise serious questions about the viability of U.S. power. The pressing issue today is: How will the economic crisis affect our country’s role in the world? Or, more bluntly: Is America’s empire facing foreclosure?

The answer involves more than just quibbles over the semantics of U.S. dominance. Together, the fallout from the imperial hubris of the Bush administration and the discrediting of the deregulated market fundamentalism that thrived even under Bill Clinton have opened new possibilities for reshaping the global order in the Obama years.

Stretched Beyond the Limits?

The theory of imperial decline that has become standard over the past two decades is known as “overreach” or “overstretch.” Historian Paul Kennedy most famously described the concept in his 1988 book, The Rise and Fall of the Great Powers. Kennedy argued that, historically, dominant world powers doomed themselves by engaging in overseas adventures that drained their strength and strained their finances. His analysis, with its implication that the United States could well follow the pattern of past empires, proved influential. The term “imperial overstretch” quickly became a fixture in mainstream political discussion.

At the time, American conservatives fumed. They argued that the British-born professor was a doomsdayer who did not appreciate America’s unmatched power. When the Soviet Union collapsed and the American economy took off in the 1990s, they considered themselves vindicated. However, it appears that Kennedy may yet have the last laugh.

Today, the price tag on America’s global military posture looks more imposing than ever. Even under President Obama—whose administration has proposed cutting a few costly and outmoded weapons systems--the United States will spend upwards of a half trillion dollars per year to fund its armed forces and keep up its “Baseworld.” This is what author and foreign policy analyst Chalmers Johnson named the country’s sprawling network of overseas encampments, rarely noticed by citizens at home but bitterly resented by much of the world. The United States officially owns 737 bases worldwide, worth more than $127 billion and covering at least 687,347 acres in some 130 foreign countries. “Once upon a time, you could trace the spread of imperialism by counting up colonies,” Johnson writes in his 2007 book, Nemesis: The Last Days of the American Republic. “America’s version of the colony is the military base.”

Johnson explains, “The purpose of all these bases is ‘force projection,’ or the maintenance of American military hegemony over the rest of the world. They facilitate our ‘policing’ of the globe and are meant to ensure that no other nation, friendly or hostile, can ever challenge us militarily.” Since the end of the Cold War, holding such unrivalled power has been a stated cornerstone of U.S. defense policy.

We must now ask: Can such hegemony plausibly be maintained? On the objective level, President Bush made the strains on empire more severe by occupying multiple countries and creating a need for more troops than the military could recruit. Highlighting this dilemma, Kennedy argued in a 2006 interview, “U.S. Army generals would definitely say that America is overstretched.”

But even more significantly, Bush upped the political and economic costs of empire by engendering ill-will and resistance to the United States throughout the world. A key aspect of imperial overstretch is that it must be measured relatively. It depends not only on objective factors, like the size of the U.S. military, but also on how other international actors choose to respond to America’s foreign policy prerogatives. Ironically, as the neoconservative “imperial globalists” of the Bush administration placed ever more stock in America’s hard power, they only ended up demonstrating its impotence. In Iraq and Afghanistan, the United States has shown itself unable to create stability or suppress insurgency with its might. Like its failure in Vietnam, the fiasco in the Middle East has emboldened opposition. The neocons dreamed of Iraq as a democratic ally and platform for U.S. power in the region. Instead, the country is now a symbol of the superpower’s weakness.

Democratic resistance also determines the relative limits of empire. Among our allies, the Bush administration’s “with us or against us” attacks on multilateralism diminished the willingness of other powers to shoulder part of the burden of America’s overseas adventures. Members of the international community, disgusted by imperial globalism’s failure to produce real security, increasingly refused to go along. This left a politically isolated United States with the stark and foreboding prospect of policing the world alone—a humbling proposition even to an administration notably lacking in humility.

Dangling the Dollar

President Obama may be able to reverse some of the diplomatic damage of the Bush years, but his administration faces problems of its own. Global force projection requires not only a huge amount of political capital; at a most fundamental level it demands financial treasure. Thus, degrees of overstretch must also be gauged relative to economic health—something which is now in short supply. Many would think that America, in the throes of financial crisis, would be destined for imperial bankruptcy.

The United States, accustomed over the past 15 years to running a large current account deficit, has clearly been living beyond its means. While its bubble economy was expanding, the government relied on foreign investors to pay for its excessive military spending. And on the consumer level, families went into credit card debt and borrowed against the value of their homes to keep consuming.

It was an unsustainable state of affairs, and most nations would never have been allowed to maintain it. The International Monetary Fund (IMF) would have railed against wanton economic mismanagement and warned creditors not to invest in that country unless the government promised sweeping reforms. Even without the institution’s influence, textbook economics holds that, on seeing such signs of economic weakness, investors would shy away from the country, its currency would fall, consumers would no longer be able to afford as many foreign goods, and the economy would undergo a necessary, if painful, “correction.” Financial hardship and declining standards of living would logically prompt a country to scale back pricey involvements abroad.

Now that crisis has struck, it would seem that we are overdue for a tough reckoning with imperial costs. However, the state of the markets is not the only factor in play. Like in the political sphere, the ability of the United States to survive economically as a hegemon depends in large part on whether others decide to support, tolerate, or resist the present order.

What makes the United States different than other countries? As the world’s political superpower and largest economy, America’s dollars serve as the reserve currency for the rest of the world. Foreign countries keep their money in dollars because they believe they are more dependable than any alternative. As long as other nations are willing to keep pouring money into the dollar, the United States can finance ever-larger deficits.

Ironically, one effect of the crisis thus far has been to sustain high demand for the dollar. The logic is simple. In a chaotic economy, many investors consider U.S. Treasury bonds the only safe place to hold their money—even if interest rates are low. But this won’t last forever. Already noises of discontent have come from major investors. As world leaders were gathering in London for the recent G20 summit, Zhou Xiaochuan, the governor of China’s central bank, called for a new “super-sovereign reserve currency,” which would displace the dollar.

Progressive economists such as Paul Krugman and Dean Baker have debated the significance of China’s latest posturing, and it is doubtful that an immediate abandoning of the dollar is in the offing. But when other countries do decide to change economic strategies and turn to a new reserve currency, it could be a tipping point for America’s imperial designs. Washington need only consult London about the gravity of this problem. As many historians have observed, the unraveling of the British Empire came hard on the heels of the shift away from pounds sterling as the global currency of choice.

The Promise and Perils of Multipolarity

Even if the United States weathers the crisis with its economy more or less intact, most political observers believe that its power will diminish in coming years, at least relative to that of other countries. “Multipolarity” has become the watchword of the day. In a multipolar order, there will no longer be a sole superpower, the United States, calling the shots. Instead, America will have to function within a constellation of regional political and economic powerbrokers.

Even before the financial crisis, U.S. government intelligence sources predicted a significant international realignment over the next two decades. In early 2005, the National Intelligence Council released a 119-page report entitled Mapping the Global Future. As Slate reported, the document argued that in the year 2020 “the United States will remain ‘an important shaper of the international order’—probably the single most powerful country—but its ‘relative power position’ will have ‘eroded.’ The new ‘arriviste powers’—not only China and India, but also Brazil, Indonesia, and perhaps others—will accelerate this erosion by pursuing ‘strategies designed to exclude or isolate the United States’ in order to ‘force or cajole’ us into playing by their rules.”

These predictions are proving to be well founded. According to the London Independent, the G20 summit put a version of a multipolar order on display; it was “a summit that show[ed] the new balance of power.” There, “the voice of the United States was one, albeit an influential one, among others…. By inclination or by necessity, the post-Bush United States seems to see its place in the world a little differently: less American exceptionalism, more consensus-seeking. In the G20, the presence of China, India and Indonesia, among others, gives a foretaste of a future world order.” Standing out among other nations, “China made its shy debut as a rising power.”

Debates rage about the implications of the multipolar shift. Some commentators have worried that, paralleling the rise of fascism in the interwar period, a global economic collapse could bring reactionary, xenophobic movements to power in many countries. And already in the Bush years, conservative defenders of empire, such as Harvard historian Niall Ferguson, spread fear about the prospects of unipolarity’s end. “If the United States retreats from global hegemony—its fragile self-image dented by minor setbacks on the imperial frontier—its critics at home and abroad must not pretend that they are ushering in a new era of multipolar harmony, or even a return to the good old balance of power,” he wrote in Foreign Policy. “Unfortunately, the alternative to a single superpower is not a multilateral utopia, but the anarchic nightmare of a new Dark Age.” The historian warned of “Waning empires. Religious revivals. Incipient anarchy. A coming retreat into fortified cities. These are the Dark Age experiences that a world without a hyperpower might quickly find itself reliving.”

Of course, those who most bemoan the loss of “hyperpower” are the same people who cheered the invasion of Iraq. And unfortunately, in its tenure as a global hegemon, the United States bolstered repressive and undemocratic governments at least as often as it thwarted them. Yet there is some amount of justified caveat here for multipolarists: imperial decline does not guarantee progress. Certainly, other rising powers will need to be subjected to the same level of public scrutiny and democratic criticism as past goliaths.

But while the rejection of both corporate and imperial models of globalization may not be sufficient for creating a more just global order, it is necessary. Today’s economic crisis, global in scope, will mean real pain for working people and for economically vulnerable communities throughout the world, those who will suffer most during a “Great Recession.” But there is also hope in this time of crisis. The dual delegitimization of empire and of market fundamentalism has created more space for global alternatives than has existed since the end of the Cold War. Now is a moment ripe for the spread of political and economic visions emerging from below. And it is an opportunity for the United States to craft a vision of international relations more humble, more egalitarian, and more democratic than what has previously been pursued in freedom’s name.

A Softer Power?

The United States, whatever its troubles, is not going to disappear. Predictions of collapse from the left and right alike usually imagine imperial decline as a more fixed and predetermined process than it is. Economic weakness in the United States, even the displacement of the dollar on the world scene, will not mean that America will fade into irrelevance in one swift, dramatic gesture. The United States remains by far the world’s largest economy, and its military might will dwarf that of up-and-coming rivals for the foreseeable future. Even in a multipolar environment, the United States could hold a status as “first among equals” for decades to come.

More pressing, then, than determining whether the United States is an empire is the question of how Washington will manage the transition to a situation where its relative dominance has diminished. Because the contours of this decline are highly variable, the foreign policy decisions of the Obama administration remain very relevant.

One current danger is that President Obama, while rejecting the brash unilateralism of the Bush administration and pulling back the fist of U.S. hard power, will return to a softer form of imperial power. Under Bill Clinton, the United States used multilateral institutions such as the IMF, the World Bank, and the World Trade Organization (WTO) as primary instruments of foreign policy. While staffed with economists in business suits rather than grunts in fatigues, these bodies exerted considerable control over foreign peoples.

The international financial institutions forced developing countries to comply with the prescriptions of the “Washington Consensus” in order to receive economic support. These market fundamentalist policies benefited a corporate elite while deepening inequalities and producing very limited growth in the countries where they were implemented. Corporate globalization’s deregulated markets also proved crisis-prone, producing systemic shocks ranging from the Asian financial crisis of 1998 and 1999 to Argentina’s economic collapse in 2001 to the crisis that began with the collapse of America’s subprime housing sector.

During the Bush years, the power of the IMF and the World Bank dramatically waned, in part because of the discrediting effects of the earlier crises and in part because of the Bush administration’s disinterest in investing in multilateral structures. The Bush White House, with its penchant for unilateralist hard power, did not appreciate the advantages of Clinton’s preferred imperial instruments, and was sometimes downright dismissive of them. British journalist and Guardian columnist George Monbiot perceptively described this as “the unacknowledged paradox in neocon thinking.” He wrote in an April 2005 column that the Bush foreign policy operatives

want to drag down the old, multilateral order and replace it with a new, U.S. one. What they fail to understand is that the "multilateral" system is in fact a projection of U.S. unilateralism, cleverly packaged to grant other nations just enough slack to prevent them from fighting it. Like their opponents, the neocons fail to understand how well Roosevelt and Truman stitched up the international order. They are seeking to replace a hegemonic system that is enduring and effective with one that is untested and (because other nations must fight it) unstable. Anyone who believes in global justice should wish them luck.

For critics of the IMF and World Bank, seeing these bodies diminish was a sign of progress. But it now looks like the job of dismantling the past hegemonic order was far from complete. The Bretton Woods system may be more enduring and effective than even Monbiot would have guessed.

Usual Suspects

Today, the global economic downturn is giving new life to some of the institutions that did the most to create the crisis in the first place. Critics fear that the Obama administration might use these institutions to reassert U.S. hegemony, albeit in a subtler form. In doing so, Obama would no doubt look progressive in comparison to Bush. But liberal praise would be misplaced if the multilateral institutions he reanimates hold true to past practices.

At the G20 summit, the assembled leaders vowed to channel $750 billion or more through the IMF to support developing countries, tripling the institution’s resources. As the London Independent describes it, “If everyone honors their pledges, institutions that seemed on the verge of redundancy only a few years ago will soon find themselves awash with new cash and new responsibilities…. The Bush-era contempt for the UN and other multilateral forums is a thing of the past. At least for now.”

A positive interpretation of these events would hold that people and institutions change along with political conditions. “The Larry Summers of 2009 is not the Larry Summers of 1999,” the argument goes--positing that the former Treasury secretary, a leading corporate globalist in the Clinton years, will help to advance a far more progressive economic agenda within the altered circumstances that have allowed him to become Obama’s director of the National Economic Council. The IMF might optimistically be expected to undergo a similar rebirth. Although the Fund in the past worsened the Asian financial crisis by making countries cut spending and eliminate economic regulations, it will now be compelled to remake itself as an institution able to stimulate spending and distribute Keynesian largesse to those in need.

This view may not be entirely naïve. In advance of the G20 summit, British Prime Minister Gordon Brown explicitly delineated a break with former practices. “Too often,” he acknowledged, “our responses to past crises have been inadequate or misdirected, promoting economic orthodoxies that we ourselves have not followed and that have condemned the world’s poorest to a deepening crisis of poverty.” Brown went further at the G20 summit itself, flatly declaring, “the Washington consensus is over.”

The New York Times reported corresponding shifts within the IMF:

There have already been signs of change. Late last month, the IMF announced a revamp of its lending criteria so that less emphasis is placed on evaluating a borrower’s ability to meet “structural performance criteria,” the fund’s jargon for such measures as spending cuts and tax increases. Supporters of the IMF say that the fund has learned lessons from its experience working with Asian countries after the region’s financial crisis in 1998 and is now in a position to offer credit without harsh conditions.

There are, however, many reasons to be suspicious. The IMF’s habit of imposing harmful conditionality is hardly ancient history. Bailout deals brokered over the past year with countries such as Hungary, Latvia, Romania, and Pakistan have called on recipient countries to drive up interest rates, reduce the wages and benefits of civil servants, or otherwise prevent their central governments from injecting money into their economies—the exact opposite of what any real “stimulus” plan would demand.

The G20’s embrace of the WTO was similarly problematic. Despite this institution’s history in promoting neoliberal deregulation, the G20 leaders committed to forging ahead with currently stalled negotiations there.

Commenting on the summit’s final declaration, trade lawyer Lori Wallach, director of Public Citizen's Global Trade Watch, argues that "One page of the communiqué identifies ‘major failures ... in financial regulation and supervision' as ‘fundamental causes of the crisis' ... while the next page reaffirms the leaders' commitment to concluding the WTO Doha Round negotiations that require further deregulation of finance."

The international financial institutions’ continued failures relate to their woefully undemocratic structures. At the IMF, reforms of recent years have made token overtures toward increasing the voting power of developing countries. However, the United States, with more than four times the voting shares of China and with sole veto power, is still firmly at the helm. There is little evidence to suggest that either the U.S. Treasury Department or the international financial institutions are capable of nurturing a truly democratic globalization.

First Do No Harm

A key step in moving toward a post-imperial foreign policy would be to abandon the idea that the United States is at its best when it intervenes, militarily or economically. The Obama White House is right to reject Bush administration militarism. But in crafting something different it should be conscientious to “first do no harm.” Reviving a version of corporate globalization under the guise of a return to multilateralism would violate this dictum.

As it considers alternatives, the Obama administration should recognize that some of the most dynamic democratic processes in the world have been taking place in Latin America, which has recently experienced a form of benign neglect. While this is a region traditionally regarded as the U.S. imperial backyard, it was often overlooked in the Bush years, when Washington focused on its engagements in the Middle East. The outcomes have been promising.

In the past decade, Latin American voters have consistently beaten Prime Minister Brown to his insight about the dysfunction of the Washington Consensus. In country after country they have elected new leaders with mandates to break with the international financial institutions and to pursue new economic policies. As a result, even before the current crisis, countries such as Bolivia, which has one of the poorest populations in the hemisphere, have been devising more equitable ways of distributing natural resource wealth--and more democratic ways of involving historically marginalized indigenous populations in the political process. Countries like Argentina, which suffered tremendously under Washington-backed neoliberalism, have worked to develop alternative, regional financial structures to allow for greater independence.

To the extent that it allows such experiments to progress, an inward focus by the Obama administration on dealing with the domestic implications of the economic crisis would be welcome. In that case, whether the still-unrivaled U.S. economy, its cultural reach, and its worldwide network of military bases will continue to qualify it as an imperial power—or whether other language more accurately describes its sway within an emerging multipolar system—will remain open to debate. But we will have moved closer to the day when “enlightened” and “self-confident” foreign administrators, whether in pith helmets or cuff links, are permanently retired.

Mark Engler is author of How to Rule the World: The Coming Battle Over the Global Economy (Nation Books, April 2008). He can be reached via the web site http://www.DemocracyUprising.com

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